Pensions warning as cost of living crisis hits UK workers' retirement plans

Many people say they are anxious and overwhelmed about how they will manage financially when they retire

Pension fears heightened by the cost of living crisis have left UK workers feeling increasingly concerned about how they will manage financially in their retirement years. Nearly half of adults avoid thinking about the subject altogether because it makes them feel too anxious and many say it's a struggle to build up a decent pension pot, new research has found.

Retirement adviser My Pension Expert commissioned an independent survey of 2,000 UK adults. Of those not yet retired, 45 per cent said they avoid planning for the end of their working life because it's too much of a worry, while just 36 per cent are confident they will retire with enough cash to achieve their desired lifestyle.

Just over half (51 per cent) say that finding a balance between short-term financial goals and saving for retirement is too difficult, with 57 per cent stating that the rising cost of living has made it difficult to save for retirement in recent years.

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In addition to these struggles, a lack of financial education and advice emerged as another concern. Over half (56 per cent) of respondents think pensions are complicated and confusing, and 38 per cent find it difficult to access reliable financial information, education or guidance.

Lily Megson, policy director at My Pension Expert, said: "After years of financial volatility, it’s no wonder so many people are feeling overwhelmed and anxious about their retirement prospects. Tellingly, our research shows how this is resulting in people avoiding pension planning altogether, which must be addressed.

"Compounding the issue, gaps in financial literacy have made some people feel ill-equipped to manage their finances, leaving them in the dark as to what a successful retirement saving strategy might look like for them.

"As an immediate priority, improving access to accurate, reliable financial information and advice is crucial to getting Britons back on the right track. Once people have the right resources to understand their options and feel confident in their retirement planning, the path ahead will likely feel far less anxiety-inducing."

Many people believe their State Pension alone won't be enough to live on. In April 2025, the full amount of the New State Pension is set to rise by £460 from £11,502.40 to £11,962.60 a year. Meanwhile, someone on the full rate of the old, pre-2016 Basic State Pension will see a rise from £8,814 to £9,167 per year, an annual increase of £353.

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